Europe feels like it's starting to panic according to a business executive friend. He's correct.
With huge humanitarian and global economic implications, the concerns about energy supplies are getting worse.
Europe's dependence on Putin and the cheap gas Russia provides was already years in the making before the war. It is probably one of the reasons that Putin got bolder.
If energy costs continue to go up, the German industrial economy is at risk of slowdowns or shutdowns. On Monday, as maintenance activities get underway, the risk of Putin cutting off the flows for more than a week is high. The EU has the biggest piece of gas import infrastructure.
Germany is not the only country that is at risk.
Norwegian gas flows to the U.K. were in danger due to a labor strike.
The U.K. is trying to reopen a natural gas storage site that was closed in order to provide more capacity.
Dutch farmers are protesting over not thought out climate and emissions rules that could threaten Europe's food supply, and France is pushing for more Iranian barrels on the market, as well as wanting more from the Organization of the Petroleum Exporting Countries.
German natural gas storage levels need to be solidified before winter. There is a good chance of energy rationing.
As demand destruction kicks in, it is hard not to see a dramatic European economic and financial downturn. How can German cars cost so much to make? We will figure it out.
The ultimate question is how much sacrifice the people of Europe will make for Putin.
It is starting to feel like 2007, with second and third derivatives impacts possible on debt, banks and the global economy. Europe and Germany are likely to talk about more utility and industrial rescues. There is no need for a quick end to the war.
I wouldn't mind being wrong about this. Things need to be easy for a while.
Please pray for good weather in Europe. Better leadership is possible across Europe in the future.
All Rights Reserved © 2024
